Abstract: The relationship between cash dividend policy and company performance is a hot issue that is concerned by both the theoretical and practical circles. By selecting China’s A-share listed companies from 2010 to 2016 as research samples, this paper empirically examines the relationship between the degree of product market competition, the level of cash dividends, and the company performance. The results show that to increase the cash dividends by the listed companies can help improve their performance, and that the degree of product market competition is positively correlated with the level of cash dividends. Then it further examines the role of product market competition in adjusting the relationship between the level of cash dividends and the company performance. The findings reveal that if the industry has higher degree of product market competition, its level of cash dividends will also be higher, and the performance of its listed companies can be all the more improved. The regulators should examine the heterogeneity of the industry and the companies thoroughly, establish a scientific and effective dividend supervisory mechanism, and promote the healthy development of the capital market.

Key words: product market competition; cash dividend; company performance; capital market